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BANKING & FINANCE
The Brunei Darussalam Central Bank
(BDCB) plays a leading role in carrying
the responsibilities of the country’s
monetary policy, while also issuing
Brunei’s currency as well as supervising
and regulating the financial institutions
operating in the country.
As stipulated under the Brunei
Darussalam Central Bank Order, 2010,
BDCB primarily aims to achieve and
maintain domestic price stability;
ensure the stability of the financial
system through financial regulations
and prudential standards; assist in
the establishment and functioning
of effective payment systems and
subsequently, to oversee them; as
well as to foster and develop a sound
financial services sector.
The country’s current monetary
system is based on the Currency
Board Arrangement, underpinned
by the Currency Interchangeability
Agreement betweenBrunei Darussalam
and Singapore.
2021 marked a significant milestone
for BDCB after commemorating its 10
th
anniversary. This also coincided with
Brunei’s ASEAN Chairmanship that
year, with the central bank realising the
initiatives through their role as Chair
of ASEAN Central Bank Governors
Meeting, ASEAN Capital Markets
Forum and ASEAN Taxonomy Board for
Sustainable Finance.
On the national agenda, BDCB
contributes towards achieving and
aligning Brunei Vision 2035 goals
specifically in the areas of economy,
digital economy and climate change.
These efforts can be seen through
initiatives such as the Technology
Risk Assessment Framework (T-RAF)
to address risks associated with
technology and the establishment of a
Digital Payment Hub to further enhance
the digital retail payment landscape.
BDCB also publishes the Residential
Property Price Index (RPPI) and the
Business Sentiment Index (BSI) as
the country’s key macroeconomic
indicators. RPPI measures the rate at
which the private residential properties
purchased by households are changing
over time, while BSI is designed to
measure the sentiment and confidence
of businesses in Brunei through surveys
including future business conditions
and investment.
To ensure efficient liquidity for the
smooth functioning of the domestic
banking system, BDCB conducts its
monetary operations through the
issuance of BDCB I-Bills and Overnight
Standing Facilities. As part of its
commitments to the Financial Sector
Blueprint 2016-2025, and its continued
efforts to develop an efficient money
market, the two-week BDCB I-Bills
based on the Syariah concept of
Wakalah bil Ujrah
were successfully
launched with the maiden issuance on
October 22, 2020. The BDCB I-bills aim
to support the liquidity management of
primary investors in Brunei Darussalam,
and subsequently expand the list of
money market instruments available
to BDCB and the domestic financial
sector.
BDCB has also worked to ensure that
its objectives of achieving prudential
standards and financial regulations are
met through the issuance of several
notices and guidelines.
In promoting market discipline through
meaningful
regulatory
disclosure
requirements, BDCB issued Revision
to the Regulatory Notice on Pillar 3 –
Public Disclosure Requirements, as well
as Revocation of Regulatory Notice on
Disclosure on Risk Management, Credit
Management, Internal Audit Function,
Compliance and Compliance Function
and Internal Control Systems.
As Brunei experienced its second
wave of infections in August 2021,
BDCB worked closely with the financial
industry to alleviate the burden faced
by businesses and sustain the country’s
economic activity. BDCB provided
regulatory flexibility to banks following
the rollout of interim measures to
support specific sectors impacted by
COVID-19. BDCB also helped lessen
the burden faced by money changers
by amending the Notice on Temporary
Regulatory Relief Measure for Money-
Changing Business.